La. OK's grants for homes sold before Road Home began

The state decided today to make recovery grants available to more than 5,000 Road Home applicants who sold their homes before the hurricane compensation program began in 2006.

The Road Home estimates that 5,102 applicants sold their homes after Hurricanes Katrina or Rita and before the official launch of the Road Home effort on Aug. 29, 2006. The state now says those applicants will be eligible to recover the property value they lost and weren't able to recover from insurance and the private sale, up to $150,000.

Therefore, an applicant whose home was worth $200,000 before the storm, collected $100,000 in insurance and other government aid after the storm and sold it for $50,000 before the Road Home program began would now qualify for a $50,000 grant.

The offer is only available for those who sold before the program launch date and applied to the Road Home before its deadline a year ago.

Since the program began, Louisiana officials had promised to compensate those who sold their homes early, but only if there was money left over after all other related programs, such as elevation and low-income grants, were fully financed.

When the Road Home's $7.5 billion budget appeared to be several billion short of serving those homeowners who were trying to rebuild, the group who sold their homes at a loss before the state launched the aid program appeared to be out of luck.

But late in 2007, Congress sent an additional $3 billion and the state Legislature put in another $1 billion. Since the spring, state budget estimates showed there would be about $60 million available to serve those who sold their homes early.

State spokeswoman Christina Stephens said today that current budget estimates have $100 million set aside for sold homes.

"It is worth noting that this is a very preliminary estimate of what it will cost to serve these homeowners," Stephens said. "The actual budget is going to depend on homeowner eligibility and participation. There are roughly 5,300 homeowners who could be eligible, though we do not anticipate that all will get awards."